Telephone Interview With Mort Crim of WDIV-TV in Detroit, Michigan

Mr. Crim. There are several issues that are of unique interest to the people of Michigan and the
people of Detroit. Right now the auto companies are negotiating with the UAW. Many of the
workers are saying that Reaganomics has not worked for them, that the auto companies are
registering record profits, that they have been forced to give concessions. What do you say to
these workers?

The President. Well, I think Reaganomics has moved -- or worked for everyone, in that we do
have a recovery. And we have 7 million more people at work today than were working in 1980.
Now, I hope that in the coming negotiations -- certainly, government should not interfere. As a
former union president, myself, I believe that these problems are between management and labor
to work out.

But I do think that we have to keep in mind -- yes, workers did make some concessions. On the
other hand, while the automobile companies now are back in a profit position, there were several
years there in which they were running tremendous losses. And I hope that there will be not only
fairness, as there should be, but some restraint also in the negotiations, that we don't do anything
right now at this point to turn off the recovery, the expansion that we're having. It is one of the
best recoveries in all the seven or eight recessions that have occurred since World War II.

And other than that, I'm not going to inject myself into the middle of that battle. But I don't think
it's fair for anyone to suggest that they have not benefited from this recovery. We were in a very
precarious state -- our entire industrial capacity as a nation.

Federal Deficits

Mr. Crim. Mr. President, you promised during your campaign a balanced budget by the end of
your first term. Instead of a balanced budget, we have record deficits. Chairman Lee Iacocca of
Chrysler Corporation calls that ``the largest threat to a healthy auto industry that exists.'' How do
you answer him?

The President. Well, I answer it by saying that we have had continuous deficits for 50 years. I've
been one of the loudest voices, I guess, back over the years in saying that this was a false policy
for this country to follow. It followed a policy that believed that a little inflation was good for us.
And I, 20 years ago, said that a little inflation one day becomes runaway inflation. And it did in
this present time.

Now, when I promised an economic program that, before the end of my term -- first term --
would eliminate deficits, before the election even took place the economy had so worsened that I
said that promise no longer could be kept, that the situation had changed from the time that I,
with the help of some fine leaders in this country and business executives, had put together an
economic plan to try and bring us down from inflation and deficits and everything else.

We are going to continue to try. The size of the deficits now were in large part brought about by
the recession that we were in. They were cyclical, as it's called, because they were the product of
that recession. As we recover, we're finding that our own projections of deficits are too high.
We're also finding that our projections of the government revenues after our tax cut -- our
projections were too low, that we are receiving more money than we had anticipated in tax
revenues.

So, all of this is helping to bring down the deficits below the projected point. But more than that,
we have to continue reducing government costs. The Federal Government simply costs too much
and is taking too high a percentage of the gross national product. To continue doing that would
run the risk of going back into the repeated cycles of recessions that we've had.

But I think now that, with this economy, which is on a sound basis, with continued trimming of
government spending, I think that we will get a handle on the recession and on the deficits.

Detroit Tigers

Mr. Crim. Mr. President, let's talk about something real pleasant now: an organization that has
been going up faster than the gross national product, and I'm talking about our own Detroit
Tigers. Have you been following their exploits?

The President. Yes, I have, as a matter of fact. I know that they're in first place of the Eastern
Division of the American League and the -- I think their win-loss run is about 695 percent or so.
[Laughter] And all I can say is, ``Bless you, boys.''

Mr. Crim. And all we can say is, ``Thank you, Mr. President.'' And the Detroit Tiger fans are
grateful.

The President. Okay.

Mr. Crim. Thank you very much.

Note: The interview began at 2:47 p.m. in the Diplomatic Reception Room at the White House. It
was recorded for later broadcast.

The interview was released by the Office of the Press Secretary on August 1.